The Las Vegas Bad Check Unit: One of a kind

Reuters Staff

4 Min Read

(This story accompanies a Special Report: Casino's attempt to collect debt exposes world of Chinese high-rollers)

By Joel Schectman

LAS VEGAS, Sept 30 (Reuters) - Here, in the city of glitz and promise, just a few poor plays can bury a gambler under a tower of debt. And when a player doesn't repay the loans, Las Vegas has power to employ a tool unavailable to most every other creditor: jail.

Las Vegas Justice Court sits two miles from the cacophony of the Vegas strip, in a sparsely developed area of downtown dotted with bail bond shops. Vices of the strip - prostitution, fights, drug possession - are adjudicated in this court.

In a windowless basement of the courthouse sits Las Vegas' most fearsome debt collector: the Clark County District Attorney's Bad Check Unit. This is where the books often get settled on casino debt-fueled gambling. The Bad Check Unit office resembles a DMV with numbered counters and grumbling visitors waiting their turn.

Whatever the motive that led a player to take out a loan to gamble and then not repay the casino, their judgment day comes here, in a starkly lit room. Debtors arrive after the casinos have turned their debts over to prosecutors, who have issued arrest warrants.

In 2015, the Bad Check Unit chased after 2,607 casino debts - more than 200 a month, according the district attorney's office. For debts over $10,000, the scofflaws have to pay the district attorney's office an additional 10% to settle the case and escape jail time. Chasing errant debtors generated $2.2 million overall for the district attorney's office last year, public records show.

If the gamblers pay the casino back in full, or negotiate a settlement with the casino, charges are usually dropped, said Thomas Pitaro, a Las Vegas attorney who defends clients accused of bad casino debts.

Otherwise, they face potential jail time. The district attorney's office was unable to say how many cases ended with jail, but a spokeswoman said the number was small.

The Supreme Court and federal law have generally prohibited states from jailing people over unpaid debts. And casino debt was largely legally unenforceable in the United States until early 1980's.

But in a bid to help its paramount industry, the Nevada state legislature passed a law in 1983 that made casino markers - a kind of gambling IOU signed by players - legally enforceable like a bounced check. Defaulting on a casino debt became the equivalent of a issuing a bad check, Pitaro said.

"It has evolved into the use of state coercive power to collect debts to protect the major industry," Pitaro said from his office, blocks from the courthouse.

Without the threat of criminal charges, the casino industry has long argued, scofflaws wouldn't pay up.

Casinos send letters to players, and if they're not paid, file a complaint with the DA's Bad Check Unit.

One man in the waiting room of the Bad Check Unit, a former city worker, said he was there to repay a casino debt of a few hundred dollars he forgot he owed after moving to California. A police officer jogged the debtor's memory during a traffic stop, telling him he had an outstanding warrant for bad checks, but giving him a chance to make payment without being hauled in.

That debt led him back to the Las Vegas Bad Check Unit, where he had one last chance to clear his hand.